The treasury of the NEO project has been managed through a unique setup, with hundreds of millions of dollars in crypto assets controlled by personal wallets, lacking multi-sig protections and formal oversight. According to co-founder Da Hongfei, approximately 85% of the funds are controlled by Erik Zhang, the project's other co-founder, with a single signature.
The native NEO and GAS tokens held by Zhang are valued between $200 million and $250 million, exceeding the project's current market capitalization of $197 million. The two co-founders have been publicly disputing since December, resulting in rival governance plans and an unsuccessful mediation effort.
Da's proposal, published on GitHub, suggests redomiciling the Neo Foundation to the Cayman Islands, establishing an independent five-member board, and redistributing tokens to holders. In contrast, Zhang's counter-proposal involves staying on the board and keeping the Foundation in Singapore. Zhang's plan also calls for an investigation into historical asset management, including potential corruption and improper asset transfers.
Da has dismissed these accusations, stating that there is no corruption or misuse of funds. The project's treasury holds approximately $460 million in assets, double its market value, with the token having dropped 98% from its 2018 peak. The treasury is split between two halves, with the native NEO and GAS tokens under Zhang's control and the non-token assets managed by NGD, the entity run by Da.
Da has framed his proposal as mutual disarmament, where both he and Zhang would sacrifice individual control over assets. However, the success of this proposal depends on Zhang's cooperation, and Da has expressed uncertainty about Zhang's willingness to cooperate.